Sydney cab drivers say fares are fair

Sydney taxi drivers deny their fares are too expensive and say a report recommending a slight drop in overall charges will make it hard for cabbies to make a living.

NSW Taxi Council, the industry peak body, said the draft report by the pricing regulator IPART would make it difficult for drivers and operators to make a decent return on fares.

The Independent Pricing and Regulatory Tribunal has recommended increasing the flag fall, or cost of hailing a cab, but reducing the amount paid for waiting times and distance travelled.

"The problem with this report is that by putting downward pressure on the fares you are creating disincentives which offset any incentives which have been created," the council's CEO Roy Wakelin-King told AAP.

The current flag fall for taxis is $3.50.

But this should jump to $4 to encourage drivers to accept short fares, IPART says.

It also recommends adding a surcharge of $2.50 for all fares between 5pm and 5am on Friday and Saturday nights to encourage more taxis to be on the road when they are needed.